Carriers say NDP bill seeking to unlock phones is unnecessary

A Private Members’ Bill introduced by the NDP last week would require carriers to unlock clients’ cellphones for free after their three-year contract expires—but the wireless industry says it’s an unnecessary measure. NDP MP and small business critic Bruce Hyer introduced on Thursday Bill C-560, the Cell Phone Freedom Act. The bill is not yet on the order of precedence, the list that determines the priority sequence of private members’ business. If passed, the bill would require a wireless provider to remove, free of charge, any network lock on a cellphone after a contract expires or when a consumer buys a non-subsidized phone. The bill would also require carriers to inform consumers when they buy locked phones. “Parliament needs to end repressive cellular phone network locks in order to promote consumer choice and to encourage much-needed competition in Canada’s cell phone market,” Hyer said in a release. With unlocked cellphones, consumers can shop around for better service pricing, but they don’t benefit from the subsidized rates that come with contract phones. Hyer told The Wire Report in an interview that public reaction to his bill has been very positive, and that his office has received hundreds of emails. Hyer has set up a petition and Facebook group under the banner “Don’t lock my freedom” to support his bill. The Facebook group had 145 members on Monday. Jim Johannsson, a spokeman for Telus Corp., said unlocking phones has not been an issue for the company. “It hasn’t been much of an issue because most customers are looking to upgrade to newer technologies when they start getting close to the end of their contract. But that said, if there were a demand for it, we would start looking at it for us to put in place a process. Customers could go through us to have us unlock the handset,” he said. Telus customers with expired contracts can have their phones unlocked by third parties or can do so themselves, he said. Bell Canada spokeswoman Jacqueline Michelis said in an email to The Wire Report that the company can unlock customers’ Bell HSPA phones for a $75 fee through client care—but such a move cancels the warranty. Bell also offers plans for unlocked phones, but Michelis said network compatibility issues could cause problems with data services and roaming. Brownlee Thomas, a wireless industry analyst with Forrester Research, said unlocking a phone after a contract ends isn’t the right way to seek better consumer prices. Most people want to upgrade to a new phone after three years, she said. “It’s more scandalous that Canada has three-year contracts in the first place. I don’t know any other place that has three-year contracts. The longest is two years, and two years is about a normal life for a cellphone anyway,” she said. “If I were the government, I would be pushing to make two-year contracts mandatory, rather than forcing them to offer to unlock them after three years … Who would go three years with the same phone? After three years, forget it.” When asked whether unlocking three-year-old phones is relevant in today’s marketplace, Hyer stood by his bill, saying consumers should have the choice. “If the companies say that most companies want a new cellphone at the end of their contract anyway, then they don’t have anything to worry about do they?” Hyer said unlocking phones will be as beneficial to consumers as it will be for carriers because it will grow the mobile market through choice and increased competition. But Johannsson said unlocking phones is also a technical issue. He said Telus does its best to accommodate customers who approach the company with an unlocked phone, but that some phones are simply incompatible. “If a phone comes from somewhere else in the world, unlocked, if it isn’t equipped to work with the frequencies that we have available to us for cellphones in Canada, there is a chance we may never get it working,” he said. Johannsson said locking phones is a way for carriers to ensure that customers’ devices are fully compatible with the network—meaning better service for the consumer and fewer customer service calls to the company. “Carriers aren’t doing this to be restrictive on customers. The real issue is they’re trying to make it easy for consumers and easy on themselves, because one of the things that is hugely difficult for consumers, and for us, is a lot of service calls on a cellphone. Every service call costs us money and costs a consumer time.” Liberal MP and industry critic Marc Garneau said he supports the bill in principle because it would introduce more competition into the wireless market. He said the idea of unlocking cellphones after contracts have expired or when consumers buy a new phone without a contract “makes sense.” Michael Geist, Canada research chair in Internet and e-commerce law at the University of Ottawa, wrote in a column in the Toronto Star Monday that the Canadian mobile market is in a good position to move towards unlocked phones. He said the wireless industry is seeing a “dramatic shift in power” as handset makers no longer rely upon wireless carriers to distribute their devices. Geist added that consumers have been under the mistaken impression that it is illegal to unlock their phones. “No one would ever question whether consumers have the right to tinker with their car or to use the same television if they switch providers from cable to satellite, yet the wireless industry somehow convinced the public that unlocking their phones—consumers’ own property—was wrong,” he wrote. Marc Choma, director of communications at the Canadian Wireless Telecommunications Association (CWTA), said his association’s members have not discussed an over-arching policy on offering to unlock clients’ cellphones. Bloc Québécois spokesperson Carl Boisvert said the party is not commenting on the bill until it has been debated in the House, and Conservative MP Mike Lake, the parliamentary secretary to the minister of industry, did not return phone calls by deadline Monday. kfournier@thewirereport.ca

Carriers say NDP bill seeking to unlock phones is unnecessary

News | June 21, 2010

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